During the Austrian EU presidency, Austria took initiatives towards defining economic indicators in a manner more relevant to welfare in the European Council’s decision of 15/16 June 2006.
“For better understanding of interlinkages between the three dimensions of SD, the core system of national income accounting could be extended by inter alia integrating stock and flow concepts and non-market work and be further elaborated by satellite accounts e.g. environmental expenditures, material flows and taking into consideration international best practices.”
To prepare for this, the BMWFW (at that time still known as BMWA) financially supported the research project “Potentials for Extending National Income Accounts by Integrating Sustainable Development Indicators” in 2006. In 2009 this initiative was given a concrete form with the project “Extending National Accounts: The Stock of Durable Consumer Goods”, funded by the BMWFW and the Federal Ministry of Agriculture, Forestry, Environment and Water Management (BMLFUW).
The project “Extending National Accounts: the Stock of Durable Consumer Goods”
A country’s economic performance is calculated as part of national accounting. One important potential way of improving the information value of national accounting is to make greater use of stock accounts, which are hardly used even though basically provided for in national accounting. One central aspect in this regard is the determination of the stock of durable consumer goods. Durable consumer goods are not used just once but over an extended period of time. Therefore, instead of through current expenditures, their contribution to individual economic welfare can be measured through the capital services, based on capital stock, generated by these consumer goods. The stock of durable consumer goods is also highly interesting from the perspective of sustainability.
In November 2007 the European Commission, European Parliament, Club of Rome, OECD and WWF hosted the conference “Beyond GDP” (refer to: http://www.beyond-gdp.eu/). with the objectives of clarifying which indices are most appropriate to measure progress, and how these can best be integrated into the decision-making process and taken up by public debate.
As a direct outcome of the conference, the European Commission released its Communication “GDP and beyond: Measuring progress in a changing world” on 20 August 2009. The Communication outlines an EU roadmap with five key actions to improve the indicators of progress in ways that meet citizens’ concerns and make the most of new technical and political developments.
The Commission on the Measurement of Economic Performance and Social Progress
In 2008 French President Nicolas Sarkozy established a commission chaired by Joseph Stiglitz, Amartya Sen and Jean Paul Fitoussi to discuss the measurement of economic performance and social progress. This took place against the background of increasing concerns about the adequacy of current measures of economic performance, in particular those based on GDP figures, and the relevance of these figures as measures of societal well being.
The commission focussed on the areas of sustainable development and environment, quality of life and classic GDP-related issues.
The commission’s final report was published in September 2009.
For more information about this commission and its working papers and reports, please go to: